Brown unveils new spending plan

Gov. Brown has proposed a $106.8 billion state budget for the fiscal year beginning in July that reflects an improving economy, bumps public school funding by more than $6 billion and makes no mention of a $990 million universal kindergarten program sought by legislative Democrats.

The Democratic governor released the 2014-15 spending plan Thursday, a day earlier than originally scheduled by his office. The election-year document, which reflects an 8 percent increase in General Fund spending, was widely leaked Wednesday.

“Despite the recent improvements in our budget situation, there remain a number of major risks that threaten the state’s new found fiscal stability.”

The proposed budget totals about $155 billion in state-driven spending, a figure that includes special funds and debt servicing, but not the billions of dollars in federal pass-through money.

The governor’s budget summary, while noting the improved economy, contained cautious language about spending – clearly a signal to the Democratic supermajorities in both houses and a tacit acknowledgement that 2014 is an election year.

The governor said his proposed reserve was seen as protection against the volatility and uncertainty of revenues in the past.

He also did not say whether a water infrastructure bond aimed at the November ballot actually would proceed as planned — it’s been delayed and downsized over the years — and he noted that a task force meets today to consider an emergency drought declaration.

“Despite the recent improvements in our budget situation, there remain a number of major risks that threaten the state’s new‑found fiscal stability, including the remaining budgetary debt and hundreds of billions of dollars in longer term liabilities,” the budget summary said.

“The state’s fiscal history is riddled with budgets that made permanent obligations— both spending increases and tax cuts — based on temporary revenue increases. After these spikes in revenues disappeared — as they always do— the state was forced to cut programs and raise taxes. This Budget seeks to avoid this unproductive boom‑and‑bust cycle.”

The governor also plans to use $250 million from the state’s cap-and-trade auctions for carbon emission credits and transfer the money to the state’s bullet-train program, which lately has been buffeted by adverse court and regulatory decisions.

Brown said using the money for high-speed rail was appropriate and conformed with the intention of state law to use the auction proceeds to reduce greenhouse gases.

The governor’s budget projects a $4.2 billion reserve by mid-year — a dramatic turnaround from January 2011, when he took office.